Banks, which account for nearly half the index, have fallen about 7 percent since the beginning of the year as a judicial inquiry into the financial sector has exposed widespread misconduct and regulatory shortcomings.

“There has been a sell down quite dramatically already and while we have seen a bounce back from that level, there might be some speculation whether or not they (the authorities) will be able to enforce such strong penalties,” said Dale Raynes, Associate Director at CPS Capital.

Raynes said the proposed heavy fines may be enforced and followed by job cuts, but the wider industry would survive. This would encourage “bottom fishers” to buy high-dividend stocks when their share prices are very low.

Commonwealth Bank of Australia, gained 0.8 percent, having shed nearly $10 billion from its market value since the turn of the year.

Riding the broader sentiment in the sector, Australia and New Zealand Banking Group also gained.

The lender said it would book a loss of A$632 million ($484 million) in its half-year results on last year’s divestment of two of its wealth businesses, which didn’t come as a surprise as the loss had been flagged before.

Westpac Banking Corp climbed 1.1 percent, while Macquarie Group Ltd rose 0.9 percent to its highest since March 22.

Materials stocks also traded higher, with the Australian metals and mining index jumping 0.9 percent, underpinned by stronger prices for iron ore. [IRONORE/}

BHP, the world’s largest miner, rose 1.2 percent to its highest in almost two months. On Friday a Brazilian court postponed to June 25 the deadline for BHP produce a compensation plan for victims of the 2015 Samarco mine disaster.

A dam at the Samarco iron ore mine, jointly owned by Vale and BHP, collapsed in 2015, killing 19 people.

Newcrest Mining strengthened 2.6 percent to a six-week high. The gold miner said the first 200 metres of its Cadia Hill mine’s open pit been approved for use as a tailings storage facility. The flagship mine restarted processing earlier this month.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index ticked down 0.2 percent to 8,304.3.

Dairy firm a2 Milk Company Ltd fell 3.2 percent, accounting for most of the losses on the benchmark.